The person who invented e-Books died last week, at the age of 64. His name is Michael Hart, and his little-known story shows how one person with one idea can truly change the world. *

Hart was a student at Univ. of Illinois. (Recall that this university was a major pioneer in computer science, thanks to Marc Andreesson, who thought up Mosaic while at U of Illinois, Mosaic later became Netscape, the Internet browser). He was given a user’s account on a Xerox Sigma V mainframe computer in the school’s Materials Research lab in 1971, an account worth, according to him, $100 m. at the time. He tried to think up a project that would justify the cost, even though it was free for him. On July 4, 1971, he attended an Independence Day fireworks celebration and later stopped at a grocery store. With his purchases, he received a copy of the Declaration of Independence. Hart typed the document and intended to send it as an email to all the users of ARPANET (the precursor of the World Wide Web). But a colleague said this would crash the system! (The whole Declaration is only 1,357 words!). So instead, he posted a notice saying the text could be downloaded. Hart said he wanted to “encourage the creation and distribution of e-books” in order “to help break down the bars of ignorance and illiteracy.”.

Hart’s initiative and modest idea gave birth to Project Gutenberg, which today lists more than 30,000 downloadable e-Books in 60 languages. The Project got off to a slow start. Hart created only 313 e-books by 1997. But by 2021, Project Gutenberg’s 50th anniversary, it is predicted there will be a billion e-Books available – and, said Hart in an email, “you will be able to carry them all in one hand!”.

Hart once told a magazine called Searcher: “I was just waiting for the world to realize I’d knocked it over. You’ve heard of cow-tipping? The cow had been tipped over, but it took 17 years for it to wake up and say, ‘Moo’. “

Rest in peace, Michael Hart. You’ve showed us how an idea and a very tiny initial proof-of-concept can snowball into a change-the-world industry. And best of all, you lived to see it happen.

A great deal of research on creativity (e.g. neurobiology, functional MRI, etc.) is fascinating but of no immediate use. In contrast, Harvard Prof. Teresa M. Amabile’s work always leads to creativity-enhancing tools. Her new book, The Progress Principle: Using Small Wins to ignite Joy (written with her husband, Steven J. Kramer, a clinical psychologist), is among her best work. It has a clear and simple message:

Our best days at work occur when we make even small progress toward our work objectives. Our worst days at work occur when we are hindered from making such progress. The key to unleashing creativity is “a sense of making progress on meaningful work” and creating an environment in which such progress is fostered.

What is interesting is that according to Amabile, managers just don’t get it. They continue to believe the key to creativity is salaries, bonuses, incentives, rewards. Only 5 per cent of all managers she surveyed ranked ‘progress’ as the number one key motivator.

Amabile and Kramer studied 238 white-collar employees at seven large organizations, and asked each to keep a work diary, with daily entries, for about 10 weeks, in which workers “describe one event that stands out in your mind” daily. There were 12,000 diary entries in all. They define “inner work life” as “the confluence of perceptions, emotions and motivations that individuals experience as they react to and make sense of their work day”. In the diaries, salaries and bonuses barely registered! (So much for the fundamental theory of economics!). But diary entries that reported work progress often showed an “inner work life” surge that in turn increased the likelihood of creative productivity.

What I learn from this work is this: There are two types of ‘rewards’, extrinsic (money, praise, bonuses) and intrinsic (internal satisfaction). Small, frequent intrinsic rewards (“progress”) are crucial in spurring productivity, because, I believe, they build our own image of our self-effectiveness (capability), which in turn empowers and triggers creativity. Ironically, the more managers stress extrinsic rewards, the less intrinsic rewards flourish.

Managers: Give your team autonomy. Ask its members from time to time what you can do that will help them succeed. Give them resources (Amabile says cheapskate managers hurt creativity rather than spur it). Make the work, or project, itself its own reward. Find people, especially, for whom the work itself is the main reward. And, then, watch the ideas flow! Remember: “People are more creative, productive, collegial, and committed to their work when they have a positive inner work life.”

Can anything be clearer, simpler, or more obvious – and less applied in practice?

The Speech Obama Won’t Make But Should: “Our Economy Will Thrive Only When We Make What We Invent”

by Shlomo Maital

President Obama will make a key speech to the nation tomorrow night (Sept. 8), about his plans for creating jobs. Here is what he should say.

I have an announcement. I will not stand for re-election in 2012. I am taking responsibility for the mess America is now in. Instead of tackling the real issues – job creation – I wasted all my energy and political capital on health care reform, which in fact was the least of America’s worries at the time. My advisors told me not to, I didn’t listen, and so I am choosing not to run again for President. This will enable me to tackle the job issue without critics saying I am playing politics.

In the remaining days of my term of office, I will do the following. First, state the truth. America’s GDP, 80 % services, must restore manufacturing to 25% of the economy (it’s now 12 %) within a decade. America’s wealth and greatness came from inventing products, then making them. Today we do only half – we invent things, and let China make them. It isn’t working. We have a $500 b. deficit in manufactured goods. That means we have to borrow from China, to enable us to buy the goods that China makes, so China can have low unemployment. If we made these manufactured goods ourselves, we would have 10 million new well-paying jobs, directly, and 30 million more generated by the spending of the newly-employed. That is enough to wipe out unemployment and rebuild the incomes of the middle class, as well as kill the looming double-dip recession.

I will introduce legislation that eliminates all the huge tax advantages American companies enjoy by producing abroad. I will also initiate a plan to create a German-style vocational high school stream that creates a cadre of young people with skills useful in factories. I will offer a tax holiday to companies like Apple, if they bring their piles of cash home from abroad and invest it. Despite our deficits, I will double federal grants for R&D and link these grants to the condition that any devices emerging from this R&D must be made in the U.S. I will impose a tariff on all Chinese goods that brings their price to the level it would be, if the yuan were 3.5 per dollar rather than 6.8 per dollar. The World Trade Organization will scream, but its screams will be music to my ears. I will ask all Americans to buy red-white-and-blue – check the label, and buy only products that are Made in America. If you do, you create jobs for others, and ultimately for yourself.

Our economy can thrive only when we make what we invent. It’s so simple. China is working feverishly to invent what it makes. Good for them. We will work equally hard to make what we invent. May the best country win.

* this speech is based on the New York Times Op-Ed by Susan Hockfield, MIT President, “Manufacturing a recovery”, August 29, 2011.

On Sept. 8/2001, Howard Lutnick was literally on top of the world, as CEO of Cantor Fitzgerald, prince of Wall St., looking down at his rivals from his 105th floor office in the World Trade Center.

On Sept. 9, when American Airlines Flight 11 struck Tower One, 658 of his employees (including his younger brother Gary) perished, and Lutnick himself survived by a fluke (he was bringing his son Kyle to his first day of kindergarten).

Here is how Lutnick endured and prevailed. He cut off paychecks to the families of his employees on Sept. 13 – arousing huge bitterness. His London office head Lee Amaitis reconfigured Cantor’s trading systems so that trades could be processed through the London office. Lutnick moved to a windowless computer center in Rochelle Park, NJ, and shifted to eSpeed, electronic trading. He came up with a plan to give the families of those company employees who perished 25 % of Cantor’s profits over the coming five years, and appointed his sister Edie Lutnick, a lawyer, to head the charity that ran this program. Angry families said, “a quarter of nothing is nothing!”. But soon they were silent, because the checks that went out were larger than the salaries employees had earned. The bereaved families now say, Lutnick did everything he promised. Lutnick rebuilt Cantor, into two businesses – a stock and bond trading desk and an investment bank operation. Today it thrives. Before 9/11 Cantor employed 2,100 people worldwide. Today it employs 5,000! Strangely, the bulging debt America created, that led to the 2007-9 crisis, actually greatly benefited Cantor Fitzgerald, which runs nearly half of all trades in US Treasury securities.

The source of Lutnick’s resilience is perhaps his own background. He was orphaned as a teen, and worked his way up from the bottom at Cantor, in an industry where Ivy League and wealthy parents are a huge advantage. He was greatly disliked, as a ruthless competitor. He says he rebuilt Cantor mainly, even solely, to generate profits for the families of employees who died. “The only way to take care of everybody,” he said, “was to have a company”. He uses what he calls the ‘surfer’s theory’ – “you see a big wave, you keep surfing, going forward, you just don’t look back!”.

I wonder how many of us could experience 9/11 as Howard Lutnick did, then rebound and rebuild. The ability of the human spirit to bounce back from adversity and catastrophe is infinite – provided we believe in it, believe in ourselves, and work to serve others.

Based on: The New York Times: Susanne Craig, “The survivor who saw the future for Cantor Fitzgerald”, Sept. 3, 2011.

In today’s global markets, the dominant metaphor is that of ‘dominos’. One ‘domino’ (country) topples another. Tiny Greece, for instance, is threatening to topple the Euro nations. Argentina is a good example. In 2000-1, Brazil devalued its currency, the real, from one real per dollar to two, because of a flight of capital. Meanwhile, Argentina maintained its one-peso-per-dollar exchange rate. Joined in the Mercosur free trade bloc, Argentina and Brazil ran a healthy trade – until the devaluation of the real made Argentinean goods doubly expensive and destroyed Argentina’s exports. The massive crisis (see graph below) was made doubly worse when Argentina refused the draconian IMF conditions for emergency credit – and it was nearly a decade until Argentina could re-enter global capital markets.

But by 2003 Argentina had bounced back. The commodity price boom helped Argentina’s exports of corn, soy and wheat. A smart government bought dollars to keep the exchange rate favorable for exports. It taxed both exports and imports (Tea Party guys, are you there?), and used the money to pay for public works, including 40,000 new low-income housing units and a new highway between Rosario and Cordoba. A Universal Child Allowance gives 1.9 m. low-income families $42 a month per child, starting in 2009. The grant is linked to how often the child goes to school.

What can we learn from Argentina? The kind of austerity measures now being embraced by America and Europe were tried, in the 1990’s, and failed miserably. A pro-active government that promotes local industry, pro-job infrastructure and unemployment benefits puts “money in the pockets of ordinary citizens, who then spend it and spur the economy” brought Chinese-style growth to Argentina, in 2003-2010. *

Who would have thought that Argentina, once a basket case, could teach valuable lessons to America – while America, of course, learns from no-one, from no other country, because, well, because it is America. At a time when North America, Europe and Asia are all struggling, South American economies are largely thriving. No longer is South America in the ‘toppling domino’ league– if anything, it is threatened by other dominos. What a refreshing change.

Cornell Professor Thomas Seeley has written a fascinating book, Honeybee Democracy (2010). In it, he explains what beekeepers have known for years: that overcrowded hives will “swarm”, the majority of the hive’s workers will take off with the old queen and move into a new home, while the remaining bees will rear a new queen in order to perpetuate the parental colony. Somehow, these tiny bees with microscopic brains manage to find just the right new home, and engage in a fair, democratic process, without deep-pocketed lobbyists, in which the entire ‘swarm’ ‘votes’ on several alternatives, and, according to Seeley, nearly always picks the best one.

One recalls the late Kurt Vonnegut’s scandalous comment, that the only difference between George Bush and Adolf Hitler was that Hitler was elected honestly. Does bee democracy work far better than human democracy? You have to believe it does.

How the homeless swarm of bees decides where to live, and the settling of the debates among the scout bees who have found potential homesites, is explained beautifully by Seeley.

I recalled Seeley’s book while reading about a new feature-length film, “One Day on Earth”, by Kyle Ruddick, 32, surfer, and Brandon Litman, 30, serial entrepreneur. (Global New York Times, Sept. 1, 2011, p. 9). Without funding, advertising or investors, the film-makers used the Internet to “amass footage from across the globe” from over 100 countries, all of it filmed during the 24 hours of Oct. 10, based on a social network that now has more than 17,000 members. After they began, film-maker Ridley Scott (Blade Runner, Alien, Gladiator), backed by Google and YouTube, did the same, and their film “Life in a Day” was released in July. But Ruddick and Litman are undeterred by the deep pockets of Scott. Want to bet their film will be better?

Two trends are merging. One is the “cloud”. Music, films, photos, everything is now migrating to “the cloud”. A second is the “crowd”. Groups of people large and small combine to pool their brains, like bees, to create something of value. This is the ultimate democracy. When the “cloud” and the “crowd” combine – the result will change the lives of all of us, hopefully for the better.

Innovator: What new service or experience can you invent, that combines the “cloud” and the “crowd”?

What is happiness? And are there simple things we all can do that would indeed make the coming year happier? Innovation applies not just to gadgets, but also to the way we live.

I found some answers in an empirical study, still unpublished, by three psychologists: Elizabeth W. Dunn (U. of British Columbia), Daniel T. Gilbert (Harvard Univ.) and Timothy D. Wilson (Univ. of Virginia).

“The relationship between money and happiness is surprisingly weak,” they note. Their provocative title conveys their main finding: “If money doesn’t make you happy, then you probably aren’t spending it right”. The authors offer rules for increased happiness, based on a survey of a large literature on the link between how we spend our money and how happy we are. Here are a few.

1. Help others instead of yourself. Research shows the quality of our social relationships is a strong determinant of our happiness. Those who devote more money to ‘prosocial’ spending (for others) were happier, other things equal.

2. Pay now and consume later. There has been a huge shift in societies everywhere toward immediate enjoyment and delayed payment. The result is to rack up debts, while eliminating the pleasure of anticipation – saving up for something while imagining all the while how much we will enjoy it. Re-learning to defer gratification, as untold generations did before the age of the credit card, can greatly improve happiness. Living by values rather than by impulse is largely about deferred gratification.

3. Think about how you want to live, rather than what you want to buy. The authors note that “consumers who expect a single purchase to have a lasting impact on their happiness might make more realistic predictions if they simply thought about a typical day in their life.” I often think about people who buy expensive cars. They lose fortunes as their cars depreciate, but do they really gain vast pleasure in driving it from A to B compared to those who drive a clunker?

4. Buy experiences instead of things. “People are often happier,” note the authors, “when they spend their money on experiences rather than on things.” An experience is an event you live through, while a good is a tangible object you keep. A sample of over a thousand Americans showed that for every three respondents who reported greater happiness from buying things, five said they derived more happiness from buying experiences. And, of course, some experiences – like a walk on the beach at sunset – are free. You cannot make a 36-inch LED TV by yourself. But you can create an experience, like visiting a sick or lonely friend, or playing with a grandchild, without putting your hand into your pocket.

5. Have many small pleasures instead of a few big ones. “Happiness is more strongly associated with the frequency…of people’s positive affective experiences,” say the authors, “than with the intensity of those experiences”. Try more double lattés and warm croissants, instead of dream vacations and front-row concert tickets. A happiness score of ‘7’ six times a day beats a happiness score of ‘10’ once a month.

Dickens famously defined happiness as a ratio between what we earn and what we spend. Happiness is earning more than you spend; misery is the opposite. It turns out, the Dickensian prescription needs a codicil. How you spend is equally vital.